Archive for March, 2010

If you work from home, have an office or shop and are a procrastinator like me, April 15th is around the corner. I am a true procrastinator in every sense. If it wasn’t for my fiancé pushing and prodding me now, April 14th is the day I would be filing.

If you talk to your accountant there are things you can write off on your taxes for your home office. It all depends on who you talk to, what you can write off and if you should. Some believe it’s good to leave well enough alone and others will have you righting off the Pledge you buy to dust off your desk. This for me is not a write off, because you can’t see my desk under the pile of stuff (I told you I am a procrastinator, so filing and putting stuff away is not top on my list of things to do.).

First off you need an office in your home to be able to write it off. The IRS does not want to see that your office is also your living room. So if you have an office (with a desk, chair, computer, filing cabinet, and a couple of walls) you are in business. First step is to measure you office; whatever percentage of your office takes up that is the amount you can deduct off your taxes for a write off.

If you have a separate business line it’s a complete write off, but if you are sharing phone lines and utilities (electric) you can only write off a percentage. Figuring out the percentage is tricky. It might be best to just keep to whatever your space percentage write off is.

If you purchase a computer it is a write off the year you purchase. Printers, scanners, internet router, etc are all write offs. Make sure it is solely for your business. If it is a family computer by law you can’t write it off for your business.

Keep every receipt from Staples and highlight all purchases made towards the business. If you get audited it will be a tough sell to the IRS that you purchased the Barbie trapper-keeper and Transformer book bag for your business.

Really any and all supplies that you use to clean your office, run your office, fix things in your office are all tax write offs. Light bulbs, Windex, canned air to clean your keyboard, serge protectors, paint if you painted your office, etc, add them all up because they are write offs!

Depending on your home based business you get different write off’s. When I worked at a radio station in Boston, I knew a DJ/Music programmer who wrote off every CD he bought, magazine subscription that came to his house, part of his cable bill, and anything else related to entertainment because it was all research for his radio show and radio station.

My number one advice is talk to your accountant about what they think is ok to write off. NOBODY wants to mess with the IRS. Just ask Al Capone, Willey Nelson, Martha Stuart and Wesly Snipes. Besides Al Capone (for obvious reasons) they would all say the IRS mean business.

Consumer spending rose 0.5% to $52.4 billion in January, slightly more than economists had anticipated. Personal income increased 0.1% to $11.4 billion.

The Institute for Supply Management reported that the monthly index of manufacturing activity was 56.5 in February after reaching 58.4 in January. Nevertheless, it was the seventh straight month of expansion. A reading above 50 signals expansion.

The Commerce Department reported that total construction spending fell 0.6% in January after falling 1.2% in December. Economists had expected a decrease of 0.7%.

The monthly index of non-manufacturing activity rose to 53 in February from 50.5 in January. A reading above 50 signals expansion. Economists had anticipated a reading of 51. The reading was the highest since October 2007.

The National Association of Realtors reported that its pending home sales index, a forward-looking indicator based on signed contracts, fell 7.6% in January after a revised 0.8% increase in December.

The Labor Department reported productivity rose at an annual rate of 6.9% in the fourth quarter. Labor costs fell at an annual rate of 5.9%.

Factory orders rose 1.7% in January, slightly below the 1.8% increase economists had anticipated. It was the fifth straight gain and follows a 1% increase in December.

The unemployment rate held at 9.7% in February. Employers cut 36,000 jobs in February, far fewer than expected. The four-week average for continuing jobless claims fell 134,000 to 4.5 million.

Upcoming on the economic calendar are reports on wholesale trade on March 10, international trade on March 11 and retail sales on March 12.

That what the homeowner said to my old boss when we told her we had to rip out her living room ceiling. We were hired to do an addition, kitchen and one bathroom renovation. Now we had to rip out her living room ceiling.

She was not happy at all about that. She called her husband in a panic. The reason we had to rip out the ceiling is because our electrician was chasing down old wires from other places in the house we demoed and was finding live wires behind the sheetrock.

Apparently the previous owner thought he was an electrician and decided to run wires all over the house incase he ever needed them there. The only thing was, the wires were tied into the electrical panel and were live. And live buried wires could leave you dead! That’s how fires start.

It would have been one thing if they were properly capped off with a wire nut in side an electrical box (even though by code you are not supposed to cover up an electrical box with out access to it). Nope this clown ran these wires and just taped off the ends and left them free floating in the ceiling.

So even after we explained everything to the homeowner she still needed to call her husband before we did anything. I understand that, it’s more work. My boss was a nice guy and told her that he would cover the labor if she paid for the sheetrock. It was the safety of her family and technically by code she had too, but she made the right decision and said yes.

The point I am trying to make, is that with any renovation to your house, there could be surprises. You never know what you will get when you start opening up walls. By law if a contractor opens up your walls and finds violations of any kind they have to fix them.

So you might be wondering what they could possible find….Well if you have an old house you could find old cloth wires that fall apart to the touch. If you had any kind of major leaks over time (or the previous owners had the leaks), you could find rot in your framing that has to be fixed. Plumbing surprises are always fun! But don’t freak out, just plan ahead for them. In the trades they are called “extras” and they almost always happen on any job. You are not alone. If you luck out your contractor may work with you on some of the cost. Maybe not, but either way the work has to be done.

That is almost the number one rule when hiring a contractor. You get what you pay for. If someone can do the job for $5,000 less than the other guy, more than likely he is cutting corners somewhere which could lead to a nightmare for you.

I was at an old friends mom’s house years ago and she had a sun room put on to the back of the house way before I was ever there. I was walking around and noticing that the room looked like it was sinking into the ground. She told me that was because the contractor never dug the footings to the required 3 feet deep, her sun room was slowly sinking. And because it took a few years to settle, it is going to be a major nightmare to fix that problem. Just to save a few hours and labor on digging holes and pouring cement she has a room that is sinking into the ground.

Don’t get me wrong, just because the contractor’s bill is the highest doesn’t mean he is the best. You should start your search by talking to people you know. If someone you trust is giving you a name of a good contractor, it’s a place to start (I would go over to your friend’s house and check out his work before picking up the phone). Start with family and friends, than work your way down to a trusted realtor or neighbor.

Once you start talking to a contractor you are allowed to ask as many questions as you would like. In fact ask for a resume! I’m serious, ask for pictures, past client’s testimonials and than take it one step further and ask to talk to some previous clients. Most previous clients don’t mind taking that call after a major renovation to brag about their house and talk up their contractor.

Now, I know once you get a few bids from a few contractors you usually get sticker shock from the price. That causes a lot of people to wait or put the job on hold for a few months sometimes even a year. One thing to remember is that contractors who do any kind of major renovations set up their projects months in advance. The other thing to keep in mind is lumber yards and supply houses prices. They fluctuate with the price of gasoline (from their deliveries) and any other reason to raise the price. So the price of your materials can jump up in a month depending on the market.

Hiring a contractor for something like an addition can be very scary. You are trusting someone with thousands of your hard earned dollars, letting them into your home. They are usually there before breakfast and leave just before dinner, you tend to build a relationship with a contractor and that is why it is always good to find one you click with. We have all heard the contractor nightmares, so when you do find a good one, they are usually worth their weight in gold.

Last Week in the News
The Standard & Poor’s/Case-Shiller 20-city housing price index rose a seasonally adjusted 0.3% in December. It was the seventh consecutive monthly gain and follows a 0.2% increase in November.

The consumer confidence index fell to 46 in February from an upwardly revised 56.5 in January. Economists had anticipated a reading of 55. The index was benchmarked at 100 in 1985, a year chosen because it was neither a peak nor a trough in consumer confidence.

The Commerce Department reported new home sales fell 11.2% in January to a seasonally adjusted annual rate of 309,000 units from a rate of 342,000 units in December. Economists had expected a pace of 354,000.

Initial claims for unemployment benefits rose by 22,000 to 496,000 in the week ending February 20. Continuing claims for the week ending February 13 rose by 6,000 to 4.617 million.

Orders for durable goods — items expected to last three or more years — rose 3% in January after a revised 1.9% increase in December. Excluding volatile transportation-related goods, orders posted a monthly decrease of 0.6%.

Existing home sales fell 7.2% in January to a seasonally adjusted annual rate of 5.05 million units from 5.44 million units in December. The inventory of unsold homes on the market fell 0.5% to 3.27 million, a 7.8-month supply at the current sales pace, up from a 7.2-month supply in December and a 6.5-month supply in November.

The Commerce Department announced that gross domestic product — the total output of goods and services produced in the U.S. — increased at an annual rate of 5.9% in the fourth quarter of 2009, rather than the 5.7% increase initially reported last month.

Upcoming on the economic calendar are reports on construction spending on March 1, and factory orders and pending home sales on March 4.

You will be able to sell your property, get out from under a mortgage you cannot afford and lower your debt.

You can still sell your property in a declining real estate market, even if you owe more than the home is worth.

Buyers sometimes get good deals on the property or may be able to buy a home at market value in a popular area they couldn’t previously afford.

While a short sale isn’t ideal, it is typically better than aforeclosure which stays on your credit report for 10 years.

If your home goes into foreclosure and is sold at auction for less than the mortgage, you can still be held responsible for making up the difference.

Cons to doing a short sale:

The lender may refuse to do the short sale, or they may still hold you responsible for the remaining debt.

The bank’s loss is considered taxable income for you, and you may have to pay taxes on the amount.

Short sales do stay on your credit report and may make it difficult for you to a get loan in the future.

You may have to find a real estate agent willing to work for a smaller commission.

Short sales take longer to close than traditional home sales.

I can help you decide if a short sale on your Stamford home is right for you. Call me today at 203.667.0897 or email me at nicole@thepropnet.com for more information about your selling options. To learn more info on Avoiding Foreclosure visit: http://www.NicoleBorsey.com

Modern technology is a wonderful thing, creating easy “connectivity” between people all over the nation. But it’s also causing problems in many areas, and buying Stamford real estate is one of them.

Here’s the problem: Many people selling Stamford real estate may live in another city or state. In this case, negotiations may be conducted over the phone, through email, via Yahoo conversations – some even use Twitter for real estate deals and information.

At the same time, this also means that legal documents may be passed through email, uploaded to a website for easy viewing or through any number of other online methods. PDF documents, for instance, have become a very popular way to pass on legal forms because they’re easy to fill out, don’t have to printed, etc.

As the buyer, you can’t afford to take the seller’s word that they’ve accepted your position – especially through email. For instance, a buyer recently had a home sale fall through. The seller accepted the terms through email, told the buyer that the seller had signed the contract and sent it on to the agent. Somehow, even though the buyer was positive the contract had been agreed upon, the house was sold to another buyer. Although laws change from state to state, it’s always best to have the contract in printed form, with an actual signature – in ink! Without the actual contract, all you have is an email.

Although emails can be legally binding, they don’t hold a candle to having the printed and signed contract in hand.

Here are a few tips to make sure your housing purchase goes off without a hitch:

• Meet in person – This may be a difficult prospect, especially if the seller lives out of state. However, if you can’t meet them in person, their agent should at least be local. Meeting with the home seller’s legal representative (i.e. Real estate agent) is the next best thing.

• Get it in writing, and get it in print – Who wants to wait for the post office to deliver a paper contract when you can get it from an email? Well… you do. Yes, it might slow the process of buying a house and closing the deal, but so will having the seller back out.

• Verify the important points – Make sure you and the seller really do agree on the terms of the contract before you put your signature on it. You, or preferably your buyer’s agent, should go over the contract with the seller’s agent who should go over it with the seller.

It’s a great time to buy Stamford real estate, but don’t let technology lose you the contract. Cross your t’s and dot your i’s – on paper!

If you’re looking to buy a home, I’ll make sure all those t’s are crossed and i’s are dotted for you. Call me at 203.667.0897 or email me at nicole@thepropnet.com for more information.